ABRIDGED BALANCE Meaning and
Definition
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Abridged balance refers to a condensed or summarized representation of a financial statement, specifically the balance sheet. It presents the basic information about an organization's assets, liabilities, and equity, yet in a concise format and without providing the extensive details found in a complete balance sheet. This truncated version of the balance sheet is commonly used for quick reference or to provide an overview of a company's financial position.
The abridged balance highlights key elements of the financial statement, often including only the total amounts of assets, liabilities, and equity, rather than itemizing each individual component. By providing the essential figures, it allows stakeholders and users to obtain a broad understanding of a company's financial health and its resources and obligations.
This type of balance is advantageous in situations where a detailed analysis is not required or when time constraints exist, as it can be produced quickly. It is often employed in presentations, reports, or summaries where brevity is desired, enabling decision-makers to grasp the overall condition of an entity without delving into the specifics of the numerous accounts that comprise a full balance sheet.
While an abridged balance sheet provides a concise snapshot of a company's financials, it is important to note that it may lack the comprehensive information necessary for in-depth analysis. Therefore, it is commonly accompanied by a complete set of financial statements to provide a comprehensive understanding of an entity's financial position.
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Etymology of ABRIDGED BALANCE
The term "abridged balance" does not have a specific etymology because it is a combination of two separate words. However, we can examine the etymology of each word individually:
1) Abridged: The word "abridged" comes from the Middle English word "abreggen" which means to curtail or shorten. This Middle English word is derived from the Old French word "abregier" meaning "to cut short or abridge". The Latin word "abbreviare" also contributed to the development of "abridged", as it means "to shorten" or "to make brief".
2) Balance: The word "balance" has a complex etymology. It comes from the Latin word "bilanx", which originally referred to a type of balance scale.
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